2. Learning outcomes
• Relate the need of ethics in IT
• Discuss the importance of ethics integrity in IT world
• Relate the importance of ethics in business world
• Illustrate the steps involved in improving corporate
ethics
• Create an ethical considerations in decision making for a
business
• Compare ethics Vs information technology
• Illustrate steps to practice professional code of ethics
• Discuss the existing of IT professional Mal Practice
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3. What is Ethics?
• The discipline dealing with what is good and bad and
with moral duty and obligation
• Ethics is concerned with fundamental principles of
right and wrong and what people ought to do.
• Ethics is a set of beliefs about right and wrong
behavior within a society.
• Ethical behavior conforms to generally accepted
norms—many of which are almost universal.
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4. • The attitudes toward software piracy—a form of copyright
infringement that involves making copies of software or
enabling others to access software to which they are not
entitled.
• People develop habits that make it easier for them to choose
between what society considers good or bad.
• A virtue is a habit that inclines people to do what is
acceptable, and a vice is a habit of unacceptable behavior.
Fairness, generosity, and loyalty are examples of virtues, while
vanity, greed, envy, and anger are considered vices.
• People’s virtues and vices help define their personal value
system—the complex scheme of moral values by which they
live.
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5. Importance of integrity
• Your moral principles are statements of what you believe to be rules
of right conduct. As a child, you may have been taught not to lie,
cheat, or steal.
• As an adult facing more complex decisions, you often reflect on your
principles when you consider what to do in different situations.
• Is it okay to lie to protect someone’s feelings? Should you intervene
with
• a coworker who seems to have a chemical dependency problem?
• Is it acceptable to exaggerate your work experience on a résumé?
• Can you cut corners on a project to meet a tight deadline?
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6. • A person who acts with integrity acts in accordance with a
personal code of principles.
• One approach to acting with integrity—one of the cornerstones
of ethical behavior—is to extend to all people the same respect
and consideration that you expect to receive from others
• if your employer insists that, due to budget constraints,
• you not report the overtime hours that you have worked, a
moral conflict arises.
• You can do as your employer requests or you can insist on being
fairly compensated, but you cannot do both. In this situation,
you may be forced to compromise one of your principles and
act with an apparent lack of integrity
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7. The Difference Between Morals, Ethics, and Laws
• Morals are one’s personal beliefs about right and wrong.
• The term ethics describes standards or codes of behavior
expected of an individual by a group (nation, organization,
profession) to which an individual belongs.
• For example, the ethics of the law profession demand that
defense attorneys defend an accused client to the best of their
ability, even if they know that the client is guilty of the most
heinous and morally objectionable crime one could imagine.
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8. E T H I C S I N T H E B U S I N E S S W O R L D
• Ethics has risen to the top of the business agenda because, the risks
associated with inappropriate behavior have increased, both in their
likelihood and in their potential negative impact.
• Due unwise and/or unethical decision making regarding the approval of
mortgages, loans, and lines of credit to unqualified individuals and
organizations leads to collapse in business
• Eg. financial institutions such as Bank of America, CitiGroup,
Countrywide Financial, Fannie Mae, Freddie Mac, Lehman Brothers, and
American International Group (AIG)
• Unethical behavior has led to serious negative consequences that have
had a major global impact
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9. E T H I C S I N T H E B U S I N E S S W O R L D
• Several trends have increased the likelihood of unethical
behavior.
• First, for many organizations, greater globalization has created a
much more complex work environment
• that spans diverse cultures and societies, making it more difficult
to apply principles and codes of ethics consistently.
• For example, numerous U.S. companies have moved operations
to developing countries, where employees work in conditions
that would not be acceptable in most developed parts of the
world.
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10. E T H I C S I N T H E B U S I N E S S W O R L D
• The Satyam Computer Services, scandal was a corporate scandal
affecting India-based company Satyam Computer Services in
2009, in which chairman Ramalinga Raju confessed that the
company's accounts had been falsified.
• The revelation represented India’s largest ever corporate scandal
and caused the government to step in to protect the jobs of the
company’s 53,000 employees.
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11. E T H I C S I N T H E B U S I N E S S W O R L D
Another eg.
• Enron accounting scandal.
• In 2000, Enron employed over 22,000 people and had annual
revenue of $101 billion.
• During 2001, it was revealed that much of Enron’s revenue was
the result of deals with limited partnerships, which it controlled.
• In addition, as a result of faulty accounting, many of Enron’s
debts and losses were not reported in its financial statements.
• As the accounting scandal unfolded, Enron shares dropped from
$90 per share to less than $1 per share, and the company was
forced to file for bankruptcy.
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12. E T H I C S I N T H E B U S I N E S S W O R L D
Another eg.
• Enron accounting scandal.
• In 2000, Enron employed over 22,000 people and had annual
revenue of $101 billion.
• During 2001, it was revealed that much of Enron’s revenue was
the result of deals with limited partnerships, which it controlled.
• In addition, as a result of faulty accounting, many of Enron’s
debts and losses were not reported in its financial statements.
• As the accounting scandal unfolded, Enron shares dropped from
$90 per share to less than $1 per share, and the company was
forced to file for bankruptcy.
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13. E T H I C S I N T H E B U S I N E S S W O R L D
• Even lower-level employees can find themselves in the middle of
ethical dilemmas, as these examples illustrate:
• A low-level employee of the Technical Services Department of
Monroe County, Florida, was entrusted with responsibility for
both acquisition and distribution of the county’s cell phones.
• A few months after her retirement, the employee was indicted
on charges of stealing 52 county-purchased iPhones and iPads
and then selling them to friends and coworkers.
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14. E T H I C S I N T H E B U S I N E S S W O R L D
• According to CyberSource Corporation (a subsidiary of Visa Inc.
that offers e-commerce payment management services), online
revenue lost to fraud increased 26 percent from 2010 to 2011 to
the amount of $3.4 billion.
• This represents 1 percent of the $340 billion retail e-commerce
sales for the United States and Canada.
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15. E T H I C S I N T H E B U S I N E S S W O R L D
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16. Importance of Corporate Social Responsibility
and Good Business Ethics
• Organizations have at least five good reasons for promoting a
work environment in which employees are encouraged to act
ethically
Gaining the goodwill of the community
Creating an organization that operates consistently
Fostering good business practices
Protecting the organization and its employees from legal action
Avoiding unfavorable publicity
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17. Gaining the Goodwill of the Community
• The company have some fundamental responsibilities to society
• They declare these responsibilities in a formal statement of their
company’s principles or beliefs.
• Eg.
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18. • Philanthropy is one way in which an organization can
demonstrate its values in action and to make a positive
connection with its stakeholders.
• Organizations initiate or support socially responsible activities
Eg
contributions to charitable organizations and nonprofit
institutions,
providing benefits for employees in excess of any legal
requirements,
devoting organizational resources to initiatives that are more
socially desirable than profitable.
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20. For Eg. Social responsibities of SONA
ACTIVITIES:
1. To create awareness among the under-privileged and the socially disadvantaged
regarding social responsibility and livelihood promotion through Vocational skill
development.
2. To organize Training and development Programmes to improve the employability skills
of the target group in the following demand-driven Sectors:
Construction
Garment Making
Retail
Art and Craft
Beauty Culture & Hair Dressing
Information and Communication
Technology
Media
Electrical and Electronics
Renewable Energy
Production and Manufacturing
Security
Agriculture and Animal
Husbandry
Soft and Entrepreneurship Skills
Hospitality
House Keeping
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21. • To serve as Training and Resource Centre for imparting Employability Skills for
the Departments of Training and Employment Central and State
Governments.
• Corporate involved in Social Responsibility Initiatives
– Steel Authority of India Limited (SAIL), Salem Steel Plant, Salem.
(State level Best CSR AWARD)
– JSW Steel Limited, Salem Works, Pottaneri, Salem.
– TITAN, Hosur Division, Hosur.
– SAIL Refractory Company (SRC), Salem.
• To initiate Science and Technological Intervention for rural development
by utilizing the resources of the college and like minded organizations for
the benefit of the rural masses.
Adopted a village to promote a modular village for holistic development is
under process.
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22. Companies viewed as harmful to their community may suffer a disadvantage.
For example, a corporation that pollutes the environment may find that
adverse publicity reduces sales, impedes relationships with some business
partners,
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23. Creating an Organization That Operates
Consistently
• Organizations develop and abide by values to create an organizational
culture and to define a consistent approach for dealing with the needs
of their stakeholders—shareholders, employees, customers, suppliers,
and the community.
Each company’s value system is different, many share the following values:
Operate with honesty and integrity, staying true to organizational principles
Operate according to standards of ethical conduct, in words and action
Treat colleagues, customers, and consumers with respect
Strive to be the best at what matters most to the organization
Value diversity
Make decisions based on facts and principles
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24. Fostering Good Business Practices
• Good ethics can mean good business and improved profits
• Companies that provide excellent service retain their customers
instead of losing them to competitors
• Companies that develop and maintain strong employee relations
enjoy lower turnover rates and better employee morale.
• Suppliers and other business partners often place a priority on
working with companies that operate in a fair and ethical manner.
• As a result, ethical companies should have a favorable stock price
performance over unethical companies
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25. • Bad ethics can lead to bad business results.
• Bad ethics can have a negative impact on employees.
• Employees may suppress their tendency to act in a manner that seems
ethical to them and instead act in a manner that will protect them
against anticipated punishment.
• When a discrepancy between employee and organizational ethics
occurs, it destroys employee commitment to organizational goals and
objectives.
• It creates low morale, fosters poor performance, erodes employee
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26. Protecting the Organization and Its Employees from
Legal Action
• In a 1909 ruling the U.S. Supreme Court established that an employer can be
held responsible for the acts of its employees even if the employees act in a
manner contrary to corporate policy and their employer’s directions.
• The principle established is called respondent superior, or “let the master
answer.”
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27. Avoiding Unfavorable Publicity
• The public reputation of a company strongly influences the value of its stock,
how consumers regard its products and services, the degree of oversight it
receives from government agencies, and the amount of support and
cooperation it receives from its business partners.
• Many organizations are motivated to build a strong ethics program to avoid
negative publicity.
• If an organization is perceived as operating ethically, customers, business
partners, shareholders, consumer advocates, financial institutions, and
regulatory bodies will usually regard it more favorably.
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28. Improving Corporate Ethics
• Research by the Ethics Resource Center (ERC) found that only one in four
organizations has a well-implemented ethics and compliance program. The ERC
has defined the following characteristics of a successful ethics program:
Employees are willing to seek advice about ethics issues.
Employees feel prepared to handle situations that could lead to misconduct.
Employees are rewarded for ethical behavior.
The organization does not reward success obtained through questionable
means.
Employees feel positively about their company.
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30. Appointing a Corporate Ethics Officer
• A corporate ethics officer and also called a corporate compliance officer
provides an organization with vision and leadership in the area of business
conduct.
• This individual “aligns the practices of a workplace with the stated ethics and
beliefs of that workplace, holding people accountable to ethical standards
• The corporate ethics officer should be a well-respected, senior-level manager
who reports directly to the CEO.
• Ethics officers come from diverse backgrounds, such as legal staff, human
resources, finance, auditing, security, or line operations.
• The ethics officer position has its critics.
• Many are concerned that if one person is appointed head of ethics, others in
the organization may think they have no responsibility.
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31. • The ethics officer tries to establish an environment that encourages ethical
decision making through the actions.
• Specific responsibilities include the following:
Responsibility for compliance—that is, ensuring that ethical procedures are
put into place and consistently adhered to throughout the organization
Responsibility for creating and maintaining the ethics culture that the highest
level of corporate authority wishes to have
Responsibility for being a key knowledge and contact person on issues relating
to corporate ethics and principles.
• Naming a corporate ethics officer does not automatically improve an
organization’s ethics; hard work and effort are required to establish and
provide ongoing support for an organizational ethics program
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32. • The board of directors is responsible for the careful and responsible
management of an organization.
• In a for-profit organization the board’s primary objective is to oversee the
organization’s business activities and management for the benefit of all
stakeholders, including shareholders, employees, customers, suppliers, and the
community.
• In a nonprofit organization, the board reports to a different set of stakeholders
— in particular, the local community that the nonprofit serves.
• A board of directors fulfills some of its responsibilities directly and assigns
others to various committees.
• The board is not normally responsible for day-to-day management and
operations; these responsibilities are delegated to the organization’s
management team.
Ethical Standards Set by Board of Directors
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33. • The board is responsible for supervising the management team.
• Board members are expected to conduct themselves according to the highest
standards for personal and professional integrity.
• Setting the standard for company-wide ethical conduct and ensuring
compliance with laws and regulations.
• Employees will “get the message” if board members set an example of high-
level ethical behavior.
• If they don’t set a good example, employees will get that message as well.
• Board members must create an environment in which employees feel they can
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34. Establishing a Corporate Code of Ethics
•A code of ethics is a statement that highlights an organization’s key ethical
issues and identifies the overarching values and principles that are important to
the organization and its decision making.
•Codes frequently include a set of formal, written statements about the purpose
of an organization, its values, and the principles that should guide its employees’
actions.
•Intel Corporation, the world’s largest chip maker, has been rated in the top 25
every year since the list began in 2000, and was rated #2 in 2010.
• Intel is recognized as one of the most ethical companies in the IT industry.
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36. • An organizations conduct social audits of their policies and practices.
• In a social audit, an organization reviews how well it is meeting its ethical and
social responsibility goals and communicates its new goals for the upcoming
year.
• This information is shared with employees, shareholders, investors, market
analysts, customers, suppliers, government agencies, and the communities in
which the organization operates.
Establishing a Corporate Code of Ethics
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37. • An organization’s code of ethics must be promoted and continually
communicated within the organization, from top to bottom.
• Organizations can do this by showing employees examples of how to apply the
code of ethics in real life.
• One approach is through a comprehensive ethics education program that
encourages employees to act responsibly and ethically.
• Such programs are often presented in small workshop formats in which
employees apply the organization’s code of ethics to hypothetical but realistic
case studies.
Requiring Employees to Take Ethics Training
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38. • Employees may also be given examples of recent company decisions based on
principles from the code of ethics.
• It is critical that such training increase the percentage of employees who
report incidents of misconduct; thus, employees must be shown effective ways
of reporting such incidents.
• They must be reassured that such feedback will be acted on and that they will
not be subjected to retaliation
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39. • Only 43% of companies include ethical conduct in employee’s
performance appraisal
• Ethical criteria include:
– Treating others fairly and with respect
– Operating effectively in a multicultural environment
– Accepting personal accountability
– Continually developing themselves and others
– Operating openly and honestly with all
Including Ethical Criteria in Employee Appraisals
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40. • Good employees may make bad ethical choices
• Employees in highly competitive workplaces often feel pressure
from aggressive competitors, cutthroat suppliers, unrealistic
budgets, unforgiving quotas, tight deadlines, and bonus
incentives.
• Employees may also be encouraged to do “whatever it takes” to
get the job done.
• In such environments, some employees may feel pressure to
engage in unethical conduct to meet management’s expectations.
Creating an Ethical Work Environment
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41. • Few examples of how managerial behavior can encourage
unethical employee behavior.
A manager sets and holds people accountable to meet “stretch” goals, quotas,
and budgets, causing employees to think, “My boss wants results, not excuses,
so I have to cut corners to meet the goals my boss has set.”
A manager fails to provide a corporate code of ethics and operating principles
to make decisions so employees think, “Because the company has not
established any guidelines, I don’t think my conduct is really wrong or illegal.”
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42. • Few examples of how managerial behavior can encourage
unethical employee behavior.
A manager fails to act in an ethical manner and instead sets a poor example for
others to follow so employees think, “I have seen other successful people take
unethical actions and not suffer negative impacts.”
Managers fail to hold people accountable for unethical actions so employees
think, “No one will ever know the difference, and if they do, so what?”
Managers put a 3-inch-thick binder entitled “Corporate Business Ethics,
Policies, and Procedures” on the desks of new employees and tell them to
“read it when you have time and sign the attached form that says you read and
understand the corporate policy.” Employees think, “This is overwhelming.
Can’t they just give me the essentials? I can never absorb all this.”
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44. • Most of us have developed a decision-making process that we
execute automatically, without thinking about the steps we go
through.
• Steps in a decision-making process
– Develop problem statement
– Identify alternatives
– Evaluate and choose alternative
– Implement decision
– Evaluate results
– Success
Creating an Ethical Work Environment
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46. • A problem statement is a clear, concise description of the issue
that needs to be addressed
• A good problem statement answers the following questions:
– What causes people to think there is a problem?
– Who is directly affected by the problem?
– Is there anyone else affected?
– How often does it occur?
– What is the impact of the problem?
– How serious is the problem?
• Most critical step in decision-making process
Develop a Problem Statement
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47. • Example of a good problem statement:
– “Our product supply organization is continually running out of stock of
finished products, creating an out-of-stock situation on over 15 percent of
our customer orders, resulting in over $300,000 in lost sales per month.”
• Examples of poor problem statements:
– “We need to implement a new inventory control system.” (possible
solution, not a problem statement)
– “We have a problem with finished product inventory.” (not specific
enough)
Develop a Problem Statement
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48. • Enlist help to brainstorm alternative solutions
• Brainstorming with others will increase your chances of
identifying a broad range of alternatives and determining the best
solution.
• Don’t influence others to accept your solution.
• During any brainstorming process, try not to be critical of ideas,
as any negative criticism will tend to shut down the discussion.
Identify, Evaluate, and Choose an Alternative
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49. • Once a set of alternatives has been identified, the group must
evaluate them based on numerous criteria, such as effectiveness
at addressing the issue, the extent of risk associated with each
alternative, cost, and time to implement.
• An alternative that sounds attractive but that is not feasible will
not help solve the problem.
• Evaluate by weighing laws, guidelines, and principles
• Consider likely consequences of each alternative
• Alternative selected must:
– Be ethically and legally defensible
– Be consistent with policies and code of ethics
– Take into account impact on others
– Provide a good solution to problem
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50. • Most common approaches to aid in ethical decision making
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51. • The virtue ethics approach to decision making focuses on how
you should behave and think about relationships if you are
concerned with your daily life in a community.
– Focuses on concern with daily life in a community
– People guided by virtues to reach “right” decision
– More effective than following set of principles/rules
• Problems
– Does not provide guide for action
– Virtue cannot be worked out objectively
– depends on circumstances
Virtue Ethics Approach
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52. • The utilitarian approach to ethical decision making states that you
should choose the action or policy that has the best overall
consequences for all people who are directly or indirectly affected.
Chooses action that has best overall consequences.
– Finds the greatest good by balancing all interests
– Fits concept of value in economics and the use of cost-benefit analysis
• Problems
– Measuring and comparing values is often difficult
– Predicting resulting benefits and harm is difficult
Utilitarian Approach
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53. • The fairness approach focuses on how fairly actions and policies
distribute benefits and burdens among people affected by the
decision.
• Fairness approach
– Focuses on fair distribution of benefits/burdens
– Guiding principle is to treat all people the same
• Problems
– Decisions can be influenced by personal bias
– Others may consider the decision unfair
Fairness Approach
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54. • Common good approach
– Work together for common set of values and goals
– Implement systems that benefit all people
• Problems
– Consensus is difficult
– Some required to bear greater costs than others
Common Good Approach
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55. • Implement the decision
– Efficient, effective, timely implementation
– Communication is key for people to accept change
– Transition plan made easy and pain-free
• Evaluate the results
– Monitor results for desired effect
– Observe impact on organization and stakeholders
– Return to “Develop problem statement” step if further refinements may be
needed
Implement the Decision and Evaluate the Results
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56. • Public concern about the ethical use of information technology
includes:
– E-mail and Internet access monitoring
– Downloading in violation of copyright laws
– Unsolicited e-mail (spam)
– Hackers and identify theft
– Students and plagiarism
– Cookies and spyware
Ethics in Information Technology
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57. • The general public does not understand the critical importance of
ethics as applied to IT
• Important decisions are often left to technical experts
• General business managers must assume greater responsibility
for these decisions by:
– Making decisions based on technical savvy, business know-how, and a
sense of ethics
– Creating an environment where ethical dilemmas can be discussed openly,
objectively, and constructively
Ethics in Information Technology (ctd.,)
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58. • Goals of this text
– To educate people about the tremendous impact of ethical issues in the
successful and secure use of information technology
– To motivate people to recognize these issues when making business
decisions
– To provide tools, approaches, and useful insights for making ethical
decisions
Ethics in Information Technology (ctd.,)
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59. • Ethics is important because the risks associated with
inappropriate behavior have increased
• Organizations have at least five good reasons for encouraging
employees to act ethically
– To gain the good will of the community
– To create an organization that operates consistently
– To foster good business practices
– To protect the organization and its employees against legal action
– To avoid unfavorable publicity
Summary
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60. • Organizations require successful ethics programs
• The corporate ethics officer ensures that ethical procedures are
installed and followed
• Managers’ behaviors and expectations can strongly influence
employees’ ethical behavior
• Most of us have developed a simple decision-making model that
includes five steps
• Ethical considerations must be incorporated into decision making
Summary
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61. • Four common approaches to ethical decision making
– Virtue ethics approach
– Utilitarian approach
– Fairness approach
– Common good approach
Summary
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62. 1. The term ______refers to social conventions about right and
wrong that are so widely shared they become the basis for an
established consensus.
2._________ is a set of beliefs about right and wrong behavior
within a society.
3. _________are habits of unacceptable behavior.
4. A person who acts with integrity acts in accordance with a
personal _________.
5.___________ are one’s personal beliefs about right and wrong.
Quiz
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63. 6. The corporate ethics officer provides the organization with and in
the area of business conduct.
7. The __________ is responsible for the careful and responsible
management of an organization.
8.__________ requires public companies to disclose whether they
have codes of ethics and disclose any waiver to their code of
ethics for certain members of senior management.
9.The goal of the Sarbanes–Oxley Act was to ________.
10. __________is a process for generating a number of alternative
solution to a problem.
Contd.,
20/1/2017 63
J. Suji Priya AP/MCA Sona College of
Technology